Note4Students
From UPSC perspective, the following things are important :
Prelims level: MSP
Mains level: Paper 3- Budget 2021-22 and missed opportunities
The article highlights the areas of economy for which the allocation in the Budget has either been kept unchanged or reduced, signaling the missed opportunity to revive the economy.
Including the off-budget items
- An important feature of the Budget is the transparency on including the off-budget items.
- The step will result in cleaning up of the balance-sheet of the Food Corporation of India (FCI).
- The FCI was saddled with a debt of Rs 3.75 lakh crore by the end of December 2020, a significant part of which is now paid by the government.
- So is the case of the fertiliser subsidy for which the pending Rs 65,000 crore was cleared.
What was the increase in expenditure due to pandemic
- The total expenditure of the government in 2020-21 hardly increased compared to the pre-pandemic budget estimates (BE).
- The total increase in revised estimates (RE) for 2020-21 is only Rs 33,000 crore, around 1 per cent more than what was budgeted.
- The government did raise the expenditure on food subsidy, direct benefit transfer to Jan Dhan accounts (Rs 33,000 crore) and the increase in the Mahatma Gandhi National Rural Employment Guarantee (MGNREGA) (Rs 50,000 crore) and so on.
- But it did so not by generating resources and expanding the fiscal deficit but by cutting down essential expenditure such as agriculture (Rs 18,000 crore), education (Rs 14,000 crore) and social welfare (Rs 14,000 crore).
No increase in health budget
- The Budget announced increase in the health budget to Rs 2.23 lakh crore.
- This number was achieved by adding one-time expenditures on the vaccine, Finance Commission grants and inclusion of expenditure on drinking water, sanitation and nutrition.
- However, the budget of the health ministry for 2021-21 is lower at Rs 74,602 crore compared to the revised estimates of Rs 82,445 crore for the current year.
No increase in agriculture budget
- Like in many other essential ministries, the agriculture ministry also witnessed a cut with estimates of 2021-22 lower by Rs 11,000 crore than last year.
- Real investment in agriculture has been lower than 2013-14 for every year of this government.
Lack of attention on employment generation in rural area
- The lifeline provided by expenditure in rural areas on infrastructure creation and employment generation has either seen a decline in budgeted expenditure or remained stagnant.
- The budget for the ministry of rural development is lower by Rs 66,000 crore compared to the RE of last year.
- The MGNREGA budget of Rs 73,000 crore is barely enough to cover the increase in wages by 11 per cent announced in March.
- It is only 1.8 per cent higher than the actual expenditure of 2019-20, but 52 per cent lower than the RE of last year.
- Similarly, for the Pradhan Mantri Gram Sadak Yojna (PMGSY), the budget for 2021-22 has been cut by Rs 4,500 crore, not even enough to cover inflation between the two years.
Consider the question “The Budget 2021-22 has been hailed for bringing in more transparency to the budgeting exerciese? Examine the context for this, how it will benefit the country?”
Conclusion
Estimates for next year point to missed opportunities to use fiscal measures to revive the ailing economy. Unlike the pandemic, where the arrival of vaccines has given hope, the ailing economy needs much more than this budget.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Interest Rate-Growth Differential
Mains level: Paper 3- Departure from fiscal conservatism
A whopping fiscal deficit at 9.5% of GDP for FY21 highlights departure of India’s fiscal policy from the path of fiscal consolidation. The article highlights the issues related to such departure.
Important departure
- With its fiscal deficit at 9.5% of GDP for FY21 and 6.8% in FY22 Budget for 2021-22 seems to signal “spend like there is no tomorrow”.
- For well over a decade-and-a-half, we have tried attaining deficit targets set out in the Fiscal Responsibility and Budget Management (FRBM) Act (2003).
- In this Budget, target of FRBM Act has not been adhered to.
- The Budget thus marks an important departure from one of the key tenets of the Washington Consensus that was based on macroeconomic stability.
- In previous years, Medium Term Fiscal Policy cum Fiscal Strategy Statement would give the indicators for the past two years as well as the projections for the next two years.
- In this year’s Budget, the yearly projections are missing.
- The Finance Minister has promised to introduce an amendment to the FRBM Act to formalise the new targets.
The theoretical basis for departure
- The Economic Survey laid the groundwork for a departure from rigid adherence to fiscal consolidation.
- It has a quote from economist Olivier Blanchard, “If the interest rate paid by the government is less than the growth rate (IRGD), then the intertemporal budget constraint facing the government no longer binds.”
- The “intertemporal budget constraint” means that any debt outstanding today must be offset by future primary surpluses.
- The Survey argues that in India, the growth rate is higher than the interest rate most of the time.
- The Survey says that, in the current situation, expansionary fiscal policy will boost growth and cause debt to GDP ratios to be lower, not higher.
Key concerns
- An important factor for adhering to the fiscal constraint in the past was the fear that the rating agencies would downgrade India if total public debt crossed, say, 10%-11% of GDP.
- That is a risk that cannot be wished away unless the rating agencies have decided to toe the IMF-World Bank line on fiscal deficits.
- Another concern is that a large fiscal deficit can fuel a rise in inflation.
- A third concern is that, with the tax to GDP ratio not rising as expected, the sale of public assets has become crucial to reduction in fiscal deficits in the years ahead. This is a high-risk strategy.
- A large-scale privatisation almost always involves substantial FDI.
- In South East Asia and Eastern Europe, privatisation of banks meant a large rise in foreign presence in the domestic economies.
Consider the question “The Budget 2021-22 is characterised by its departure from the path of fiscal consolidation. Examine the theoretical basis for such departure. What are the key concerns?”
Conclusion
If the nation’s political economy came in the way of our meeting the FRBM targets, it is also likely to pose an obstacle to large-scale privatisation. A departure from fiscal orthodoxy is welcome. But the government needs to think of ways to make it more sustainable.
Back2Basics: Interest Rate Growth Differential
-
- A key indicator of an economy’s long-run debt sustainability is the differential between interest paid on government debt and the economy’s nominal growth rate.
- When the cost of raising debt is lower than the gross domestic product (GDP) growth rate, public debt comes with low fiscal costs.
- In such a situation, the debt-to-GDP ratio of the economy declines as debts are rolled over.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Various ports of Sri Lanka
Mains level: China as deterrent in India's neighbourhood policy
After the strong opposition from within, the Sri Lankan government was forced to revoke a 2019 agreement with India and Japan to develop the strategic East Container Terminal (ECT) at the Colombo Port.
Map Reading: Note all these major ports and try recalling their sequences in the clockwise and counter-clockwise direction.
What is the news?
- PM Mahinda Rajapaksa made a statement that the operation of the east terminal would be done by Sri Lanka Ports Authority on its own.
- Its cabinet has approved a proposal to develop the West Terminal at the Colombo Port as a PPP with India and Japan, which is seen as a bid to compensate India.
- It is unclear whether India would accept the latest proposal.
What is the Project?
- The tripartite agreement, signed by India, Sri Lanka and Japan, proposes to develop the ECT, which is located at the newly expanded southern part of the Colombo Port.
- The ECT is located 3 km away from the China-backed international financial city, known as Port City, currently being built in Colombo.
- A Chinese company was behind the controversial 2018 Hambantota port project, signed its first contract in the Port City last month.
- It is also on the map of China’s Belt and Road Initiative (BRI).
India’s reaction
- A few weeks ago EAM S. Jaishankar visited Sri Lanka where he discussed the development of the stalled project.
- India’s first response was that the island nation should not be taking a decision in a unilateral manner on an existing tripartite agreement.
Compensatory offer to India
- After the decision on revoking the 2019 agreement, SL has approved another proposal to develop the west terminal of the Colombo port with Japan and India.
- Commercially, the west terminal offer is better for India as it gives 85% stake for developers of the West Terminal against the 49% in ECT.
Sri Lanka expects India to rethink. Why?
- Indian response to this compensatory offer is unclear since there was no formal communication by SL authorities.
- Geo-politically, west terminal is almost the same India considers the security aspect and the necessity to have a port terminal in Sri Lanka.
- There is no difference between East and West Terminals except for the fact that development of the ECT is partially completed while the development of the West Terminal has to start from scratch.
SL version of the revocation
- Incumbent PM Mahinda Rajapaksa said the pressure was immense on the President Gotabaya Rajapaksa to cancel the 2019 agreement.
- The pressure was brewing so much that he was becoming so unpopular among the people.
- As per the agreement signed by the former Maithripala Sirisena-Ranil Wickremesinghe administration, India and Japan together were to hold 49% stake in ECT.
- What had finally made the government surrender before trade unions were the increasing support of many more sections in the society for the protests against privatization.
The inevitable factor: China
- This move can be easily interpreted as a reaction to Chinese communication to Sri Lanka.
- China has reportedly instigated trade unions and civil societies against this project.
Q.The threat of Chinese presence in South Asia can be tackled more effectively if India changes course in its dealings with its neighbours and becomes more sensitive to their concerns. Critically analyse.
Outcome: Souring of the ties
- For India, the strategic ECT project was important. Even the EAM has visited Colombo in January in this regard.
- Critics of the Sri Lankan government anticipate many national and international impacts surrounding the latest decision on ECT.
- Meantime, internationally an offended India can make life tough for Sri Lanka, isolating the tiny island nation, geo-politically and on the economic front.
- The economic isolation will not help Sri Lanka at a time when the country is taking steps to revive the economy amid a pandemic.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: India Justice Report
Mains level: State of justice delivery, law and order in India
The second edition of the Indian Justice Report (IJR) was recently launched.
Note the findings of this report. It is the only such report of its kind published in India.
India Justice Report
- The IJR is an initiative of Tata Trusts in collaboration with Centre for Social Justice, Common Cause and Commonwealth Human Rights Initiative among others.
- It was first published in 2019.
- It brings together otherwise siloed statistics from authoritative government sources, on the four pillars of justice delivery – Police, Judiciary, Prisons and Legal Aid.
Major highlights of the Report
- The report highlights stark conclusions when aggregated for an all-India picture.
- Women comprise only 29 per cent of judges in India.
- Two-thirds of the country’s prisoners are yet to be convicted.
- In the last 25 years, since 1995, only 1.5 crore people have received legal aid, though 80 per cent of the country’s population is entitled to.
- The report gives ranks Maharashtra once again at the top of the 18 large- and mid-sized states (with a population of over one crore each), followed by Tamil Nadu, Telangana, Punjab and Kerala.
- The list of seven small states (population of less than one crore each) was topped by Tripura, followed by Sikkim and Goa.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Jal Jeevan Mission
Mains level: Drinking water scarcity in Urban India
The urban water supply mission under the Jal Jeevan Mission announced in the Budget would include rejuvenation of water bodies as well as 20% of supply from reused water.
Access to safe drinking water has been a grave problem for India, especially in rural areas where lack of usable water has resulted in decades-old sanitation and health problems.
Jal Jeevan Mission
- Jal Jeevan Mission, a central government initiative under the Ministry of Jal Shakti, aims to ensure access of piped water for every household in India.
- The mission’s goal is to provide to all households in rural India safe and adequate water through individual household tap connections by 2024.
- The Har Ghar Nal Se Jal programme was announced by FM in Budget 2019-20 speech.
- This programme forms a crucial part of the Jal Jeevan Mission.
- The programme aims to implement source sustainability measures as mandatory elements, such as recharge and reuse through greywater management, water conservation, and rainwater harvesting.
Urban component of the mission
- The mission is meant to create a people’s movement for water, making it everyone’s priority.
- There are an estimated gap of 2.68 crore urban household tap connections that the Mission would seek to bridge in all 4,378 statutory towns.
- The Mission would also aim to bridge the gap of 2.64 crore sewer connections in the 500 cities under the existing Atal Mission for Rejuvenation and Urban Transformation (AMRUT).
- The mission would include rejuvenation of water bodies to boost the sustainable freshwater supply and the creation of green spaces.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Chauri Chaura Incident
Mains level: Mass movements for freedom struggle
PM will inaugurate the centenary Celebrations at Chauri Chaura at Gorakhpur Dist. Uttar Pradesh.
‘Chauri Chaura’ Incident
- The incident took place on 4 February 1922 at Chauri Chaura in the Gorakhpur district of the United Province.
- A large group of protesters participating in the Non-Cooperation Movement clashed with police who opened fire.
- In retaliation the demonstrators attacked and set fire to a police station, killing all of its occupants.
- The incident led to the death of three civilians and 22 policemen.
- Mahatma Gandhi, who was strictly against violence, halted the non-co-operation movement on the national level on 12 February 1922, as a direct result of this incident.
Try this PYQ:
Q.The ‘Swadeshi’ and ‘Boycott’ adopted as methods of struggle for the first time during the
(a) Agitation against the Partition of Bengal
(b) Home Rule Movement
(c) Non-Cooperation Movement
(d) Visit of the Simon Commission to India
Background
- In the early 1920s, Indians, led by Mahatma Gandhi, were engaged in a nationwide non-cooperation movement.
- Using non-violent methods of civil disobedience known as Satyagraha, protests were organised by the INC to challenge oppressive regulations such as the Rowlatt Act.
Course of the incident
- Two days before the incident, on 2 February 1922, volunteers participating in the Non-cooperation Movement led by a retired Army soldier named Bhagwan Ahir.
- The protest was planned against high food prices and liquor sale in the marketplace.
- Several of the leaders were arrested and put in the lock-up at the Chauri Chaura police station.
- In response to this, a protest against the police was called on 4 February, to be held at the local marketplace.
- Infuriated by the gunfire into their ranks, the crowd set the chowki ablaze, killing all of the Indian policemen and other staff trapped inside.
Aftermath
- Appalled at the outrage, Gandhi went on a five-day fast as penance for what he perceived as his culpability in the bloodshed.
- In reflection, Gandhi felt that he had acted too hastily in encouraging people to revolt against the British Raj without sufficiently emphasizing the importance of non-violence.
- On 12 February 1922, the Indian National Congress halted the Non-co-operation Movement on the national level as a direct result of the Chauri Chaura tragedy.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Ramsar Convention, Wetlands
Mains level: Wetland conservation in India
The Ministry of Environment, Forest and Climate Change has announced the establishment of a Centre for Wetland Conservation and Management (CWCM).
What are Wetlands?
- A wetland is a distinct ecosystem that is flooded by water, either permanently or seasonally, where oxygen-free processes prevail.
- The primary factor that distinguishes wetlands from other landforms or water bodies is the characteristic vegetation of aquatic plants, adapted to the unique hydric soil.
- Wetlands provide a wide range of important resources and ecosystem services such as food, water, fibre, groundwater recharge, water purification, flood moderation, erosion control and climate regulation.
Ecological significance of wetlands
- Wetlands provide a wide range of important resources and ecosystem services such as food, water, fibre, groundwater recharge, water purification, flood moderation, erosion control and climate regulation.
- They are, in fact, a major source of water and our main supply of fresh water comes from an array of wetlands which help soak rainfall and recharge groundwater.
- Just as forests are called the ‘lungs of the earth’, wetlands are the ‘kidneys’ that regulate water and filter waste from the landscape.
About CWCM
- WCM would serve as a knowledge hub and enable exchange between State/ UT Wetland Authorities, wetland users, managers, researchers, policy-makers and practitioners.
- It would function as a part of the National Centre for Sustainable Coastal Management (NCSCM), Chennai.
- It would address specific research needs and knowledge gaps and will aid in the application of integrated approaches for conservation, management and wise use of the wetlands.
Why need such a centre?
- India has nearly 4.6% of its land as wetlands, covering an area of 15.26 million hectares and has 42 sites designated as Wetlands of International Importance (Ramsar Sites), with a surface area of 1.08 million hectares.
- The year 2021 also commemorates the 50th anniversary of the signing of the Ramsar Convention on Wetlands on 2 February 1971 in Ramsar, Iran, celebrated annually as World Wetlands Day.
Back2Basics: Ramsar Convention
- The Convention on Wetlands of International Importance (better known as the Ramsar Convention) is an international agreement promoting the conservation and wise use of wetlands.
- It is the only global treaty to focus on a single ecosystem.
- The convention was adopted in the Iranian city of Ramsar in 1971 and came into force in 1975.
- Traditionally viewed as a wasteland or breeding ground of disease, wetlands actually provide fresh water and food and serve as nature’s shock absorber.
- Wetlands, critical for biodiversity, are disappearing rapidly, with recent estimates showing that 64% or more of the world’s wetlands have vanished since 1900.
- Major changes in land use for agriculture and grazing, water diversion for dams and canals and infrastructure development are considered to be some of the main causes of loss and degradation of wetlands.
Enthusiasts can read this document:
Faunal Diversity in Ramsar Wetlands of India
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Development Finance Institution
Mains level: Paper 3- Crucial misses in the Budget 2021-22
The article highlights the key aspects of the budget and also mention the failure to address the challenge of employment and rising inequality.
Significance of the Budget
- At its simplest, is the government’s tentative income and expenditure statement.
- At its broadest, the Budget is a pious statement of the government’s policy and ideological intentions.
- It is also the government’s statement of how it seeks to tackle the immediate political (electoral) and economic challenges.
Stepping up public investment and challenge of financing
- The present Budget’s focus on stepping up public investment by 34.5% in the coming fiscal year (compared to the current year) is a welcome sign.
- The government will borrow an additional ₹80,000 crore for the purpose in the next two months.
- Realisation of these investments would crucially depend on tax revenue realisations, disinvestment proceeds, sale of rail and road assets and the government’s ability to raise resources from the market, without raising interest rates for the private sector.
- There is no mention of the government’s recourse to debt monetisation.
- While the investment intentions are evident, its financing efforts seem to have too many loose ends.
Development Finance Institution
- To deal with the poor industrial and infrastructure investment during the last decade the Budget proposed setting up of Development Finance Institution.
- One of the reason for poor investment was a lack of long-term credit for infrastructure,which yields low rates of return spread over a long period of time.
- Commercial banks, whose deposits are for short to medium term, find it difficult to lend for long term (more than five years) for the fear of maturity mismatch.
- Moreover, as banks were laden with rising non-performing assets on account of poor corporate sector performance during the last decade.
- Also, most successful industrialising economies have relied on DFIs for providing long-term credit.
Financing challenge DFI could face
- Weakness of DFI lies in securing stable long-term, low cost sources of finance.
- The proposed DFI will be financed by foreign portfolio investments (FPI), which is a cause for concern.
- By definition, FPI represents short term inflows with exchange rate risks, while infrastructure investment is for long term whose revenues will be mostly in rupees.
- Such an investment will inevitably lead to currency and maturity miss-match, raising cost of capital.
- Hence, there is a need to consider alternative long-term sources, preferably from domestic sources, or international development agencies.
Health infrastructure
- A substantial annual fixed investment in improving urban sanitation, drinking water and sewage facilities, it is indeed a welcome step.
- A lessons from rural Swachh Bharat Abhiyan is that complementary facilities need to be constructed in a coordinated manner to maximise the effectiveness of such investments.
No effort to address rising inequality
- There is no targeted employment programme to alleviate the immediate crisis is a matter of concern.
- There is no mention of the stupendous rise in economic inequality during just the last year.
- While the poor lost their jobs and livelihoods in 2020, corporate India’s profits increased.
- The Budget could have consider a special tax on the super-rich — as many countries are now mooting.
Consider the question “What necessited the Development Finance Institution? Examine the challenge it would face in its functionig?”
Conclusion
In summary, if the capital expenditure plan outlined in the Budget speech is credible, and implemented with assured financial backing, it could revive the investment cycle. The proposed development bank for term lending for infrastructure is welcome, provided its sources of finance are cheap, long term and mostly domestic. Investments in urban public health infrastructure — sanitation, water supply and sewage — are in the right direction if implemented in a coordinated manner.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Union Budget
Mains level: Paper 3- Transparency in the Budget, bias towards subsidies and neglect of RD in allocation to agriculture sector
The article analyses the Union Budget and highlights the emphasis on transparency by showing the borrowing of the FCI and arrears of the fertiliser companies in the Budget.
Transparency in food subsidy and arrears of fertiliser industry
- Year after year, a substantial part of the food subsidy was being put under the carpet by increasing the Food Corporation of India’s (FCI) borrowings.
- The amount had crossed Rs 3 lakh crore.
- The revised estimate (RE) for FY 2020-21 is 3.66 times the budgeted figure, indicating that almost all borrowings of FCI have been cleared.
- This is indeed a historic step towards introducing transparency in the Union Budget.
- The Budget also cleared off the fertiliser industry’s arrears.
- Against the budgeted figure of Rs 71,309 crore for FY 2020-21, the revised estimate is Rs 1,33,947 crore, an increase of Rs 62,638 crore.
Neglect of R&D
- From a policy perspective one must point to the huge bias towards subsidies as compared to investments, especially research and development.
- The allocation for agri-R&D is a meagre Rs 8,514 crore in FY 2021-22 against a RE of Rs 7,762 crore in FY 2020-21.
- The marginal returns in terms of agri-growth from expenditures on agri-R&D are almost five to 10 times higher than through subsidies.
- India spends not even half of what a private global company like Bayer spends on agri-R&D — almost Rs 20,000 crore every year.
- This is why growth momentum in agriculture remains subdued and India keeps spending on freebies with sub-optimal results.
Subsidies needs a rethink
1) Food subsidy
- The FCI’s economic cost of rice is Rs 37/kg and of wheat about Rs 27/kg.
- This economic cost is roughly 40 per cent higher than the procurement price.
- This calls for giving the public distribution system’s beneficiaries the choice of direct cash transfers.
- This could create a more diversified demand which, in turn, will support diversification in agriculture.
- Further, in food subsidy, it is time to revise the issue prices for beneficiaries except for the antyodaya (most marginal) category.
- Percentage of population covered by the food subsidy should be brought down to 40 per cent.
2) Fertiliser subsidy
- Massive subsidisation of urea, to the tune of almost 70 per cent of its cost, is leading to its sub-optimal usage.
- It is time to move towards direct cash transfers to farmers based on a per hectare basis and free up prices of fertilisers.
- This will help reduce leakages and imbalance in NPK (nitrogen, phosphorus, potassium) usage and lead to efficiency, equity and environmental sustainability.
Consider the question “If one looks at India’s Union Budget, it is easy to notice huge bias towards subsidies and neglect of the research and development in agriculure in the allocation for agriculture sector. What are the implications of such bias?”
Conclusion
Overall, the expenditure on agri-R&D needs to be doubled or even tripled in next three years, if growth in agriculture has to provide food security at a national level and subsidies on food and fertilisers need to be contained. At the same time, food subsidy and fertiliser subsidy needs rationalisation.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Budget
Mains level: Paper 3- Lack of income support in the Budget
The article takes broad overview of the Budget and highlight the recovery led by the goverment spending.
Faster and sharper recovery
- The economy has been recovering sharply and faster in the last two quarters than suggested by official growth numbers.
- Official growth number remain based on antiquated year-on-year comparisons.
- Comparisons from a year ago have a serious problem in that they depend on what happened four quarters earlier and tell us very little about growth momentum.
- J.P. Morgan estimates suggest that, on a quarterly basis, India’s GDP plunged 25 per cent in the second quarter of 2020 and grew 21.5 per cent in the third quarter of the same fiscal year.
- This is a narrative markedly different from that portrayed by the official numbers.
What is the basis of optimis
- The economy is likely to have grown another 10.5 per cent in the fourth and is expected to deliver a growth rate of negative 6.5 per cent for the full fiscal year and then rise by 13.5 per cent in FY 2022.
- The basis of this optimism is two-fold.
- First, by accident or design, India has managed to break the link between infection and mobility.
- The second is the recent shift in the government’s fiscal stance.
- After delaying for nearly six months, the government began to speed up spending in September.
Government spending to boost economy
- With the economy recovering and the equity market surging, taxes and privatisation would reasonably be expected to rise.
- The revenue increase could be used to reduce the deficit while keeping spending broadly at its current share of the Gross Domestic Product (GDP).
- This would allow spending to grow 17-18 per cent, in line with the nominal GDP.
- The choice really boiled down to where to spend.
Higher fiscal deficit
- For this year, the Budget pegged the deficit at 9.5 per cent of GDP, much higher than market estimates of around 7 per cent and a 5 per cent-point rise over the previous year.
- Instead of funding food procurement through off-balance-sheet borrowing by the Food Corporation of India (FCI), as has been the case in the last few years, this year’s Budget has rightly brought some of that spending back on its accounts.
- Excluding subsidies and interest payments, the increase in the deficit is just 2 percentage points of GDP.
Continues lack of income support
- In the details, while there is a welcome emphasis on public health, infrastructure projects, and on privatisation, the glaring omission is the continued lack of income support.
- This lack of income support is important.
- Underlying the strong headline recovery in growth, imbalances in the economy have widened significantly.
- The scarring in the labour market is extensive and the likely damage to household and SME balance sheets substantial.
- While a debt moratorium and other regulatory forbearance have concealed the extent of the damage, these measures simply postpone the eventual reckoning.
- A key risk is that not only is medium-term growth impaired because of the scarring, but also that banks turn risk-averse and do not extend credit exactly when the recovery is expected to gather strength once mobility fully normalises.
Consider the question “While the Budget for 2021-21 rightly health, infrastructure and privatisation, the lack of income support could threaten the prospects of recovery. Comment.”
Conclusion
While the Budget is constructive and has helped to allay fears of excessive fiscal tightening, it did not go far enough to mitigate the tail risk that the current economic recovery does not turn into a “dead cat bounce”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: BNO visa
Mains level: Hong-Kong/ Taiwan Issue
Hong Kong residents can apply for a new visa offering them an opportunity to become British citizens after Beijing’s imposition of a national security law last year.
What is the news?
- The move comes as China and Hong Kong have said they will no longer recognise the British National Overseas (BNO) passport as a valid travel document from Sunday, January 31.
- Britain and China have been arguing for months about what London and Washington say is an attempt to silence dissent in Hong Kong after pro-democracy protests in 2019 and 2020.
What is the British move for citizenship?
- The scheme, which was first announced last year, allows those with BNO status to live, study and work in Britain for five years and eventually apply for citizenship.
- BNO is a special status created under British law in 1987that specifically relates to Hong Kong.
- Britain says it is fulfilling a historic and moral commitment to Hong Kong people after Beijing imposed the security law on the semi-autonomous city.
- Britain says breaches the terms of agreements under which the colony was handed back to China in 1997.
- The U.K. government forecasts the new visa could attract more than 300,000 people and their dependants to Britain.
Chinese stance on the move
- China says the West’s views on its actions over Hong Kong are clouded by misinformation and an imperial handover.
- Beijing also said that it would no longer be recognising BN(O) passports, saying that the citizenship offer “seriously infringed” on China’s sovereignty.
- It is unclear, however, how this could deter Hong Kongers from leaving since city residents are usually known to use Hong Kong passports while leaving for another country.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Stardust-1, Biofuels
Mains level: Not Much
Stardust 1.O was recently launched from Maine, the US has become the first commercial space launch powered by biofuel.
UPSC may puzzle you with the following type of MCQ asking:
Q.Which of the following is the unique feature of the Stardust 1.0 Spacecraft recenlty seen in news?
(a) It is propelled by Bio-fuels.
(b) It has the largest payload capacity.
(c) It is re-usable launch vehicle.
(d) All of the above
What is Stardust 1.O?
- Stardust 1.O is a launch vehicle suited for student and budget payloads.
- The rocket is manufactured by bluShift, an aerospace company based in Maine that is developing rockets that are powered by bio-derived fuels.
- The rocket is 20 feet tall and has a mass of roughly 250 kg.
- The rocket can carry a maximum payload mass of 8 kg and during its first launch carried three payloads.
- The payloads included a cubesat prototype built by high-school students, a metal alloy designed to lessen vibrations.
Why such missions are important?
- Such efforts are a part of a growing number of commercial space companies that are working to provide easier and cheaper access to space to laypeople.
- It also makes access to space cost-effective for purposes of academic research, corporate technology development and entrepreneurial ventures among others.
Back2Basics: Biofuel
- Biofuels are obtained from biomass, which can be converted directly into liquid fuels that can be used as transportation fuels.
- The two most common kinds of biofuels in use today are ethanol and biodiesel and they both represent the first generation of biofuel technology.
- Ethanol, for instance, is renewable and made from different kinds of plant materials.
- Biodiesel on the other hand is produced by combining alcohol with new and used vegetable oils, animal fats or recycled cooking grease.
Categories of biofuels
Biofuels are generally classified into three categories. They are
- First-generation biofuels – First-generation biofuels are made from sugar, starch, vegetable oil, or animal fats using conventional technology. Common first-generation biofuels include Bioalcohols, Biodiesel, Vegetable oil, Bioethers, Biogas.
- Second-generation biofuels – These are produced from non-food crops, such as cellulosic biofuels and waste biomass (stalks of wheat and corn, and wood). Examples include advanced biofuels like biohydrogen, bioethanol.
- Third-generation biofuels – These are produced from micro-organisms like algae.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MITRA scheme
Mains level: Textile sector of India
The Finance Minister has proposed setting up of a scheme of Mega Investment Textiles Parks (MITRA) Scheme in her budget speech.
Do not get confused over Sahakar Mitra Scheme and this one.
MITRA Scheme
- MITRA aims to enable the textile industry to become globally competitive, attract large investments, and boost employment generation and exports.
- It will create world-class infrastructure with plug and play facilities to enable create global champions in exports.
- It will be launched in addition to the Production Linked Incentive Scheme (PLI).
- It will give our domestic manufacturers a level-playing field in the international textiles market & pave the way for India to become a global champion of textiles exports across all segments”.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Forest produces, MSP
Mains level: MSP for MFPs
14 new Minor Forest produce items have been included under the Mechanism for Marketing of Minor Forest Produce through Minimum Support Price scheme.
Which are the 14 new MFP?
Tasar Cocoon, Cashew Kernel (Anacardiumoccidentale), Elephant Apple Dry, Bamboo Shoot (Phyllostachys edulis), Malkangani Seed, Mahul Leaves, Nagod (Vitex negundo), Gokhru (Tribulus terrestris), Pipla/ Uchithi, Gamhar/ Gamari (dry bark), Oroxylumindicum, Wild Mushroom dry, Shringraj (Eclipta Alba), Tree Moss (Bryophytes).
Now try this PYQ from CSP 2018:
Q. Consider the following:
- Areca nut
- Barley
- Coffee
- Finger millet
- Groundnut
- Sesamum
- Turmeric
The Cabinet Committee on Economic Affairs has announced the Minimum Support Price for which of the above?
(a) 1, 2, 3 and 7 only
(b) 2, 4, 5 and 6 only
(c) 1, 3, 4, 5 and 6 only
(d) 1, 2, 3, 4, 5 and 7
About MSP for MFP Scheme
- Under the scheme, Minimum Support Price for Minor Forest Produce (MFP) has been fixed for select MFP.
- The scheme is designed as a social safety net for improvement of livelihood of MFP gatherers by providing them fair price for the MFPs they collect.
- The Scheme has been implemented in eight States having Schedule areas as listed in the Fifth Schedule of the Constitution of India.
- From November 2016, the scheme is applicable in all States.
Back2Basics: Forest Produce in India
- Forest produce is defined under section 2(4) of the Indian Forest Act, 1927.
- Its legal definition includes timber, charcoal, catechu, wood-oil, resin, natural varnish, bark, lac, mahua flowers, trees and leaves, flowers and fruit, plants (including grass, creepers, reeds and moss), wild animals, skins, tusks, horns, bones, cocoons, silk, honey, wax, etc.
- Forest produce can be divided into several categories.
- From the point of view of usage, forest produce can be categorized into three types: Timber, Non-Timber and Minor Minerals.
- Non-timber forest products [NTFPs] are known also as minor forest produce (MFP) or non-wood forest produces (NWFP).
- The NTFP can be further categorized into medicinal and aromatic plants (MAP), oilseeds, fibre & floss, resins, edible plants, bamboo, reeds and grasses.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Maternal Mortality Rate, Infant Morality Rate
Mains level: Paper 2- Disparity among states in health parameters
The article focuses on the wide variation across the state in terms of the important health parameters and suggests prioritising health.
Variation across the states
- The efficacy of the public health system varies widely across the country since it is a State subject.
- Public health system can be judged just by looking at certain health parameters such as Infant Mortality Rate, Maternal Mortality Ratio and Total Fertility Rate.
- In Madhya Pradesh, the number of infant deaths for every 1,000 live births is as high as 48 compared to seven in Kerala. In U.P. the Maternal Mortality Ratio is 197 compared to Kerala’s 42 and Tamil Nadu’s 63.
- The northern States are performing very poorly in these vital health parameters.
- The percentage of deliveries by untrained personnel is very high in Bihar, 190 times that of Kerala.
- Since health is a State subject, the primary onus lies with the State governments.
- Each State government must focus on public health and aim to improve the health indicators mentioned above.
- Unless all the States perform well, there will be no dramatic improvement in the health system.
Steps needed to be taken
- The governments — both at the Centre and the Empowered Action Group States — should realise that public health and preventive care is a priority and take steps to bring these States on a par with the southern States.
- The Government of India has a vital role to play.
- Public and preventive health should be his focus by holding the Empowered Action Group States accountable to the SDGs.
- They must be asked to reach the levels of the southern States within three to five years.
- An important measure that can make a difference is a public health set-up in these States that addresses primary and preventive health.
Conclusion
Unless we invest in human capital, FDI will not help. Investing in health and education is the primary responsibility of any government. It is time the governments — both at the Centre and States — gave health its due importance.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Rate of siltation
Mains level: Paper 3- Ageing dams and challenges associated with it
Ageing dams threaten India’s water security, affect farmers’ income and increases the frequency of flooding.
What is a dam?
- A dam is a barrier that stops the flow of water and results in the creation of a reservoir. Dams are mainly built in order to produce electricity by using water. This form of electricity is known as hydroelectricity.
- Reservoirs created by dams not only suppress floods but also provide water for activities such as irrigation, human consumption, industrial use, aquaculture, and navigability.
Types of Dams
There are many dams in India, and hence there is a need to know about them as there are questions based on the dams of India. The Bank Exams like IBPS or SBI contains questions from this section.
Based on the structure the types of dams are as mentioned below:
- Arch Dam: An arch dam is a concrete dam that is curved upstream in the plan. It is designed so that the hydrostatic pressure (force of the water against it) presses against the arch, causing the arch to straighten slightly and strengthening the structure as it pushes into its foundation or abutments. An arch dam is most suitable for narrow canyons or gorges with steep walls of stable rock to support the structure and stresses.
- Gravity Dam: Dams constructed from concrete or stone masonry are Gravity dams. They are designed to hold back water by using only the weight of the material and its resistance against the foundation to oppose the horizontal pressure of water pushing against it. These are designed in such a way that each section of the dam is stable and independent of other section.
- Arch-Gravity Dam: This dam has the characteristics of both an arch dam and a gravity dam. It is a dam that curves upstream in a narrowing curve that directs most of the water pressure against the canyon rock walls. The inward compression of the dam by the water reduces the lateral (horizontal) force acting on the dam.
- Barrages: A barrage is a type of low-head, diversion dam which consists of a number of large gates that can be opened or closed to control the amount of water passing through. This allows the structure to regulate and stabilize river water elevation upstream for use in irrigation and other systems.
- Embankment Dams: An embankment dam is a large artificial dam. It is typically created by the placement and compaction of a complex semi-plastic mound of various compositions of soil, sand, clay, or rock. It has a semi-pervious waterproof natural covering for its surface and a dense, impervious core.
- Rock-Fills Dams: Rock-fill dams are embankments of compacted free-draining granular earth with an impervious zone. The earth utilized often contains a high percentage of large particles, hence the term “rock-fill”.
- Concrete-face rock-fill dams: A concrete-face rock-fill dam (CFRD) is a rock-fill dam with concrete slabs on its upstream face. This design provides the concrete slab as an impervious wall to prevent leakage and also a structure without concern for uplift pressure.
- Earth-fill dams: Earth-fill dams, also called earthen dams, rolled-earth dams or simply earth dams, are constructed as a simple embankment of well-compacted earth. A homogeneous rolled-earth dam is entirely constructed of one type of material but may contain a drain layer to collect seep water.
Major Dams in India
The major dams in India have helped the inhabitants in a number of ways like:
- Providing adequate water for domestic, industry and irrigation purposes.
- Hydroelectric power production and river navigation.
- These major dams in India and their reservoirs provide recreation areas for fishing and boating.
- They have helped in the reduction of floods.
Some facts about the issue of ageing dams
- India is ranked third in the world in terms of building large dams.
- Of the over 5,200 large dams built so far, about 1,100 large dams have already reached 50 years of age and some are older than 120 years.
- The number of such dams will increase to 4,400 by 2050.
- This means that 80% of the nation’s large dams face the prospect of becoming obsolete as they will be 50 years to over 150 years old.
- The situation with hundreds of thousands of medium and minor dams is even more precarious as their shelf life is even lower than that of large dams.
Impact on the storage capacity
- As dams age, soil replaces the water in the reservoirs technically known as silt or sediment.
- Therefore, the storage capacity cannot be claimed to be the same as it was in the 1900s and 1950s.
- To make matters worse, studies show that the design of many of our reservoirs is flawed.
- Almost every scholarly study on reservoir sedimentation shows that Indian reservoirs are designed with a poor understanding of sedimentation science.
- The designs underestimate the rate of siltation and overestimate live storage capacity created.
- Therefore, the storage space in Indian reservoirs is receding at a rate faster than anticipated.
Consequences
- When soil replaces the water in reservoirs, supply gets choked.
- The net sown water area either shrinks in size or depends on rains or groundwater, which is over-exploited.
- Crop yield gets affected severely and disrupts the farmer’s income.
- The farmer’s income may get reduced as water is one of the crucial factors for crop yield along with credit, crop insurance and investment.
- It is important to note that no plan on climate change adaptation will succeed with sediment-packed dams.
- The flawed siltation rates demonstrated by a number of scholarly studies reinforce the argument that the designed flood cushion within several reservoirs across many river basins may have already depleted substantially due to which floods have become more frequent downstream of dams.
Consider the question “Ageing dams poses several challenges for India. Identify these challenges and suggest the measures to deal with these challenges.”
Conclusion
The nation will eventually be unable to find sufficient water in the 21st century to feed the rising population by 2050, grow abundant crops, create sustainable cities, or ensure growth. Therefore, it is imperative for all stakeholders to come together to address this situation urgently.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Finance Commission
Mains level: Paper 2- Transformation of financial governance of municipalities
Transforming the financial governance of India’s municipalities
- Interim report of the Fifteenth Finance Commission of India (XV FC) indicates that it could fundamentally transform the financial governance of India’s municipalities.
- Final report for FY 2021-22 to FY 2025-26 is expected to be tabled along with the forthcoming Budget 2021-22.
- Building on the track record of previous finance commissions, the XV FC Commission has significantly raised the bar on financial governance of India’s municipalities in the interim report in at least four specific ways.
4 Provisions in the interim report
1) Increase in the outlay for municipalities
- It has set aside Rs 29,000 crore for FY 2020-21 and indicated the intent to raise the share of municipalities in the total grants’ of local bodies including panchayats gradually over the medium term, from the existing 30 per cent to 40 per cent.
- This could result in the outlay over five years being in the range of Rs 1,50,000-Rs 2,00,000 crore compared to Rs 87,000 crore during the XIV FC period.
2) Ensuring financial accountability through conditions
- Two very important entry conditions have been set for any municipality in India to receive FC grants:
- 1) Publication of audited annual accounts.
- 2) Notification of floor rates for property tax.
- These two entry conditions lay strong foundations for financial accountability of municipalities and own revenue enhancement respectively.
- Similarly, the Atmanirbhar Bharat Abhiyan links Rs 50,000 crore of additional borrowing limits for states to reforms in property taxes and user charges for water and sanitation.
- There is also a thrust on municipal bonds and municipal finance reform conditions under AMRUT.
3) Distinguishing between million-plus urban agglomerations, and other cities
- The XV FC has adopted an approach of distinguishing between million-plus urban agglomerations, and other cities.
- This is well-founded, based on the pattern of urbanisation in India, where 53 million-plus urban agglomerations comprising 250-plus municipalities account for approximately 44 per cent of the total urban population.
- The remaining 4,250-plus municipalities comprise 56 per cent of the total urban population.
- Of the remaining 56 per cent, there is a “long tail” of approximately 3,900 municipalities with 33 per cent of the total urban population.
- The XV FC has now provided for 100 per cent outcome-based funding of approximately Rs 9,000 crore to 50 million-plus urban agglomerations (excluding Union Territories) with specific emphasis on air quality, water supply and sanitation and basic grants to the rest of the cities, with 50 per cent of the end-use tied to water supply and sanitation.
- For the first time, there is also an acknowledgement of the metropolitan area as a unified theatre of action to solve complex challenges of air quality, water and sanitation, with implicit emphasis on inter-agency coordination.
4) Common digital platform for municipal accounts
- The report recommends a common digital platform for municipal accounts, a consolidated view of municipal finances and sectoral outlays at the state level, and digital footprint of individual transactions at source, the FC has broken new ground and demonstrated farsightedness.
Role of the state governments
- The ultimate responsibility for municipal finance reforms remains with state governments.
- Constitutional bodies such as the finance commission can, at best, prepare the ground and provide incentives and disincentives.
- We need municipal legislation to reflect progressive and enabling financial governance of our cities through five reform agendas:
- 1) Fiscal decentralisation including strengthening state finance commissions.
- 2) Revenue optimisation to enhance own revenues.
- 3) Fiscal responsibility and budget management to accelerate municipal borrowings.
- 4) Institutional capacities towards an adequately skilled workforce.
- 5) Transparency and citizen participation (for democratic accountability at the neighbourhood level).
- The first step needs to be predictable fiscal transfers from state governments to municipalities and other civic agencies on a formula-based approach as against the present practice of ad hoc, discretionary grants.
- State finance commissions would need to emulate the XV FC and its predecessors, and emerge as credible institutions.
- State governments need to ensure that state finance commissions are constituted on time, resourced right, and their recommendations taken seriously.
Consider the questions “Financial governance of our cities faces several challenges. Discuss the reforms that could transform the financial governance of municipalities”
Conclusion
The state government must act on these reform agenda and ensure the transformation of financial governance of their municipalities.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Art 123, Art 213
Mains level: Not Much
The ordinance on unlawful religious conversions, promulgated by the UP government last year, has not been sent to the Centre for examination, according to a reply from the Union Home Ministry.
What is the news?
- The Ministry of Home Affairs (MHA) examines bills passed by State assemblies that are repugnant with Central laws before they get the President’s assent to become a law.
- This is done in accordance with Article 213 of the Constitution which provides for an ordinance making power of the Governor of a state.
What does Article 213 say?
- Governor of an Indian state draws ordinance making power from Article 21.
- This Article empowers the Governor to promulgate Ordinance, during the recess of the legislature, if circumstances exist which render it necessary for him to take immediate action.
- To issue an Ordinance, the Governor must be satisfied with the circumstances that make it necessary for him to take immediate action.
- All Ordinances promulgated by the Governor in the State have the same effect and force as an Act of Legislature of the State.
- The Ordinance must be laid before the State Legislature when it reassembles and it must be upheld by the State legislature, failure to which the Ordinance would be invalid.
Governor CANNOT promulgate an ordinance if:
- The Ordinance has the provisions which of embodied in a bill would require President’s sanction.
- The Ordinance has the provisions which the governor would reserve as a Bill containing them for the President’s sanction.
- If an act of the State Legislature has the same provisions that would be invalid without the assent of the President.
Try this PYQ:
Q.Which of the following are the discretionary powers given to the Governor of a State?
- Sending a report to the President of India for imposing the President’s rule
- Appointing the Ministers
- Reserving certain bills passed by the State Legislature for consideration of the President of India
- Making the rules to conduct the business of the State Government
Select the correct answer using the code given below:
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2, 3 and 4 only
(d) 1, 2, 3 and 4
Centre’s scrutiny of ordinances
- MHA sends State bills for inter-ministerial consultation before they get the President’s nod.
- This is done only when it has repugnancy with central laws, deviates from national or central policy and when it can be challenged for legal and constitutional validity.
Controversy with UP’s ordinance
- The controversial ordinance was promulgated in November 2020 and so far more than 90 people, most of them minorities, have been booked.
- The law makes religious conversion a non-bailable offence, inviting penalties of up to 10 years in prison.
- It is on the ground if guilty is found to be effected for marriage or through misrepresentation, force, undue influence, coercion, allurement or other alleged fraudulent means.
- According to the Ordinance, in case of conversion done by a woman for the sole purpose of marriage, the marriage would be declared null and void.
Back2Basics: Ordinance
- Article 123 of the Constitution of India gives the power and authority to the President of India to issue an ordinance only when both the Houses of Parliament are not in session.
- In addition, it states that any ordinance can have the same force and effect as a statute of Parliament only if it is laid before both the houses of the Parliament.
- Further, Ordinance so made will hold good only for the duration of six weeks from the reassembly of Parliament.
- Article 213 mandates near-identical terms with respect to the ordinances on the subject of State authority.
- It is understood that the authority to issue ordinances shall be used only to meet the emergent demands arising out of extraordinary situations.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: MTP Bill
Mains level: Termination of Pregnancy (MTP) and associated issues
A panel of doctors to decide on the termination of pregnancy beyond 24 weeks as proposed in the Medical Termination of Pregnancy (MTP) Amendment Bill, 2020, is “unfeasible” as 82% of these posts are lying vacant in the country, finds a new study.
Q. What are the differing opinions with regards to the Termination of Pregnancy (MTP) Amendment Bill, 2020? Discuss.
About the MTP Amendment Bill
The MTP Bill was passed in Lok Sabha in March 2020 and is likely to be brought before Rajya Sabha during the ongoing Budget Session. Its salient features included:
- Proposing requirement for the opinion of one provider for termination of pregnancy, up to 20 weeks of gestation and introducing the requirement of the opinion of two providers for termination of pregnancy of 20-24 weeks of gestation.
- Enhancing the upper gestation limit from 20 to 24 weeks for special categories of women which will be defined in the amendments to the MTP Rules and would include ‘vulnerable women including survivors of rape, victims of incest and other vulnerable women (like differently-abled women, Minors) etc.
- Upper gestation limit not to apply in cases of substantial foetal abnormalities diagnosed by Medical Board. The composition, functions and other details of Medical Board to be prescribed subsequently in Rules under the Act.
- Anonymity of the person: Name and other particulars of a woman whose pregnancy has been terminated shall not be revealed except to a person authorised in any law for the time being in force.
Benefits sought with the bill
- It is seen as a step towards the safety and well-being of the women and many women will be benefitted by this.
- Recently several petitions were received by the Courts seeking permission for aborting pregnancies at a gestational age beyond the present permissible limit on grounds of foetal abnormalities or pregnancies due to sexual violence faced by women.
- The proposed increase in gestational age will ensure dignity, autonomy, confidentiality and justice for women who need to terminate the pregnancy.
Flaws in the bill
- The Bill allows abortion after 24 weeks only in cases where a Medical Board diagnoses substantial foetal abnormalities.
- This implies that for a case requiring abortion due to rape, that exceeds 24-weeks, the only recourse remains through a Writ Petition.
- The Bill does not specify the categories of women who may terminate pregnancies between 20-24 weeks and leaves it to be prescribed through Rules.
- The Act (and the Bill) require an abortion to be performed only by doctors with specialization in gynaecology or obstetrics.
- As there is a 75% shortage of such doctors in community health centres in rural areas, pregnant women may continue to find it difficult to access facilities for safe abortions.
Key Issues and Analysis
- There are differing opinions with regard to allowing abortions. One opinion is that terminating a pregnancy is the choice of the pregnant woman and a part of her reproductive rights.
- The other is that the state has an obligation to protect life, and hence should provide for the protection of the foetus.
- Across the world, countries set varying conditions and time limits for allowing abortions, based on foetal health, and risk to the pregnant woman.
- Several Writ Petitions have been filed by women seeking permission to abort pregnancies beyond 20-weeks due to foetal abnormalities or rape.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Not Much
Mains level: Decline of Mughal Empire
As the Assembly elections in West Bengal draw closer, the ‘insider-outsider’ theme has grown to become one of the topics of political debate. Bengali politicians have been terming outsider campaigners as ‘bargis’.
Bargis: Etymology of the term
- The term ‘Bargi’is of special significance in Bengal’s history.
- It is a reference to the several Maratha invasions of West Bengal between 1741 and 1751, which resulted in looting, plundering and massacres of what was then Mughal territory.
- The happenings of this specific period have affected Bengal’s consciousness so much that they have an established presence in Bengali folklore and literature.
- Today this term is used as a casual reference to troublesome outsider forces.
Who were the bargis?
- Simply speaking, the word bargi referred to cavalrymen in Maratha and Mughal armies.
- The word comes from the Persian “bargir”, literally meaning “burden taker”, notes historian Surendra Nath Sen in his 1928 work The Military System Of The Marathas.
- But in the Mughal and Maratha armies, the term signified a soldier who rode a horse furnished by his employer.
- In the Maratha cavalry, any able-bodied person could enlist as a bargir, unless he had the means to buy a horse and military outfit.
- Both the bargirs and silhedars were under the overall control of the Sarnobat (Persian for “Sar-i-Naubat”, or Commander in Chief).
Why did the Marathas raid Bengal?
- Maratha incursions into the Mughal province of Bengal (which included the regions of Bihar, Bengal and Orissa) between 1741 and 1751 came at a time of intense political uncertainty of then Mughal India.
- At the Maratha capital in Satara, Chhatrapati Shahu was trying in vain to resolve the differences between his two top power centres– the Peshwa dynasty of Pune and Raghoji I Bhonsale of Nagpur.
- As the Mughal Empire was crumbling by the 18th century, the two Maratha chieftains were scrambling to secure taxation rights in its far-flung regions, and violently disagreed over their spheres of influence.
- In Bengal – a Mughal Subah (subdivision) during this era– Nawab Subahdar Sarfaraz Khan had been overthrown by his deputy Alivardi Khan.
Try this PYQ:
What was the immediate cause for Ahmad Shah Abdali to invade and fight the Third Battle of Panipat:
(a) He wanted to avenge the expulsion by Marathas of his viceroy Timur Shah from Lahore
(b) The frustrated governor of Jullundhar Adina Beg khan invited him to invade Punjab
(c) He wanted to punish Mughal administration for non-payment of the revenues of the Chahar Mahal (Gujrat Aurangabad, Sialkot and Pasrur)
(d) He wanted to annex all the fertile plains of Punjab upto borders of Delhi to his kingdom
Stir within the Maratha empire
- After Khan’s inauguration, the provincial governor of Orissa, Zafar Khan Rustam Jung, more commonly known as Murshid Quli II, rebelled against the usurper.
- The revolt failed, and Jung enlisted Raghoji’s help to oust Khan.
- Raghoji was also motivated by internal politics within the Maratha camp, fearful as he was of Peshwa Balaji Baji Rao, also known as of Nana Saheb who trying to establish his claim over Bengal first at this time of political disturbance in the province.
Maratha invasions of Bengal
- The Marathas first entered the Mughal province in August 1741, when Raghoji’s infantry troops accompanied Mirza Baqar Ali, the son-in-law of Jung, to conquer Orissa.
- In 1743, the Bengal province faced the wrath of two Maratha armies – both, as it happened, at loggerheads with each other.
- The Peshwa forces proceeded further, committing all sorts of atrocities on the way in a land which they had ostensibly come to protect.
- Raghoji’s armies were also doing the same, but at least he had openly arrived as an invader.
Ousting the ‘local’ invaders
- Finally, in 1751, after remaining encamped in western Bengal for a significant amount of time, the Marathas reached an agreement with Alivardi Khan.
- The Nawab promised an annual tribute of 12 lakh rupees and the cession of Orissa to the Marathas. In return, the Bhonsales gave word to not return to Bengal.
Damage caused
- Ten years of Maratha invasions had crippled Bengal’s economy.
- The Dutch believed that 400,000 people had been killed. Losses of weavers, silk winders and those who cultivated mulberry were particularly high.
- Historian P J Marshall noted that people were so distressed that they would take flight even on imaginary alarms, and wander around.
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